Sunday, February 28, 2010

Universal Health and the Global Economy

Everyone weighs in on the health care debate--it's became a national pastime--so why not massage it some more?

My take on the problem is not unique, but I do notice that almost nowhere in the media are the key underlying--and crucial--issues really being addressed. The problem is expressed in what I take to be three major areas:

1 Budgetary constraints

2 Cost of services

3 Conflicting priorities

They're interdependent, of course, and can't be addressed discretely apart from one another. But it's helpful, I think, to point out some obvious facts, and to try to see the dilemma in a non-partisan way.

First, universal health care is a relatively new phenomenon. It's been around for a little less than a century, though in its present forms it's only been around for a few decades.

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Blue = Single payer universal health care

Green = Public universal health care through other means

Grey = No universal health care

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There are basically two issues with universal care: Level of care, and degree of inclusion. Also, health care availability and quality varies according to context: Universal care in an "undeveloped" country is really no care at all. Quality care involves expense: Research, modern sophisticated technologies of treatment, comprehensive training and certification and licensing of providers and facilities--these are all expensive things. Modern medicine is a highly developed estate. In 1900, for instance, medical "care" was many times simpler and less effective than it is today, and was as a consequence much, much cheaper.

Second, there's been a geometric increase in world population since 1900. It's quadrupled, approaching 7 billion people in 2010. The world's actual resources haven't grown by a single molecule in that century; what that means in real human terms is that the world is actually over four times poorer, on a per capita basis than it was in 1900, because that many more individuals now depend upon the earth's bounty, and the rate by which we're using it has increased geometrically as well. Everyone knows this growth rate is unsustainable, but almost no one talks about it publicly. "We'll find new ways of addressing these problems, science will make advances, the growth rate will naturally moderate," and so on. The cost to feed, cloth, shelter, employ and care for each human individual is a staggering burden on the planet.

The price tag attached to every person's long-term care, severe fatal or chronic disease or malady, given the contemporary approach to treatments, is far, far beyond society's resources to afford. If, for instance, we sought to deliver sophisticated, comprehensive medical care to each individual in the world today, there not only would be no money left for anything else, the world's economy would crumble under that weight. Acknowledging this fact is the first step in realistically addressing any so-called "solutions" to the world health crisis.

It's generally acknowledged that the Third World's health problems won't be solved, can't be solved, until or unless its burgeoning population can first be brought under control. Conquering infant mortality, and extending life-expectancy have been wondrous accomplishments on one level, but the resulting success of human increase is the flip-side of the coin of our advance as a species. Successfully overcoming the natural curtailments of our numbers, has meant that we've rapidly accelerated our exploitation of the world's resources to meet the extraordinary demands placed upon it. The demand for health care--like the demand for food, materials for shelter and textile, and energy--has risen far faster than our actual ability to meet that demand, and today it is far beyond anyone's wildest ambitions.

Probably the main reason that national health systems have "worked" in certain countries, is that those economies have not been overburdened by other priorities, specifically military expenditures. As a share of national product and expense, universal coverage easily trumps every other priority. Indeed, there are those who believe that the national health model has only been a brief open window of opportunity, and that eventually these systems, as popular as they may have seemed up to now, are destined either to fail, or to result in compromised delivery.

To take an example: If, say, the world were to have limited its use of petroleum to levels that were typical in 1935, the "horizon" of world petroleum reserves would probably have been 3-5 centuries. Today, with all known reserves, and at the steeply accelerating rates of consumption, it's unlikely that oil, as a predominant source of energy, will last much beyond the current century, at which point it will already be running out.

Are there sufficient possible "economies" of scale or application that could stem the increase in medical care costs in the short term? Even if we limit the discussion to the "civilized" economies of the West, it's unlikely that this will ever happen. Either the quality of care will decrease, or the numbers of those whom society deems eligible for care will decrease--or both. We're already seeing that insurance companies are "dumping" policy-holders in order to control costs. There's a troubling margin in for-profit insurance companies, but this is merely a footnote to the problem. The government already has shaken the society down: Need-based health care has been around for half a century, in the form of Medicaid, for instance. The amount of confiscated capital in the health insurance industry is just a tiny fraction of what it would cost to provide real universal comprehensive care. This is what the Republicans are fighting against: If our country opts to "entitle" all the uninsured and underinsured populations today, eventually the cost will far outdistance our ability to pay for it. Indeed, as history has shown, any publicly underwritten health policy has had the effect of driving up costs rapidly. This is what conservatives mean when they talk about capital transfers or confiscations: If the bottom 25% of the population, in terms of income, becomes lawfully entitled to comprehensive federally funded ("free") health coverage, the burden of that expense will inevitably fall, at least to a proportional degree, upon the rich and the corporations. The medical industries could effectively starve the Federal and State budgets of the entire nation in the long run; and in the short run, they would shoulder aside virtually every other budget priority, including military and defense spending.

Also, in the short term, budgetary priorities are showing just how meager the fruits of our economy will appear, once we start measuring them against the theoretical promise of universal coverage. During the Bush II Administration, money that might have been devoted to funding universal coverage was spent instead on foreign military adventures, and awarding tax breaks to the rich and the corporations. We have spent a trillion dollars on these wars since 9/11, a dead loss to the American taxpayer, since our petroleum interests, which might have been the only sensible reason for our Iraq invasion, came to nothing: The Chinese have been securing oil leases all over the world, without firing a shot.

True estimates of the eventual cost of universal coverage, under our highly sophisticated and advanced medical care system in America, are staggering. Ten trillion dollars by 2015? More! The fight over what burdens this will place on our Federal budget will get bloodier as time goes on. Why are the Republicans so partisan about holding the line against universal coverage? Because they realize that as the middle class shrinks--as America loses more jobs, and as its economy declines in real terms compared to China, India, etc.--the burden of taxation will fall increasingly upon their constituencies (the rich, the business interests, and foreign debt holders). What is happening, today, is that China and Arabia are lending America the money to run its government programs. Each new obligation we add to the burden means America--its economy--becomes that much more dependent upon the pleasure of the holders of our paper. At some point, too, America's position as the primary consumer of commodities begins to decline; when the Chinese and Indians realize they have no reason to prop up a failing giant, will they have any reason not to call in those obligations, or to stop lending to us altogether? On balance, then, our declining economy will mean that our ability to care for our own population will also decline. In several senses, Americans have been living on borrowed time over the last three decades. Nearly every indicator points to a lower standard of living for the great majority; and that includes health care, as well. Rather than "controlling health care costs" we will end up choosing whom to exclude, whom to privilege. The criteria for that will inevitably be cost. The marketplace ultimately will decide.

Debt obligations aren't open-ended. Faith in institutions, no matter how "big"--does have limits. Our Federal government will never be "too big to fail." What is the tipping point at which our ability to "sell" our debt becomes untenable? When do "U.S. Bonds" get reduced to "junk status"? When unemployment rises to 20%? When we close our public schools? When we stand down our uniformed forces? How far are we from a general national collapse, based on the amount of debt we seemed determined to take on? Can you think of any reason why China--probably the most selfish nation in the world today--would be inclined to "help" America if we fell into a deep 1930's style depression? The only argument I've ever heard is that they "depend to an inordinate degree" upon American markets for their goods. But if that market were to dry up, what then?

The world's resource balance is not open-ended. Our ability to provide comprehensive health care isn't either. The ultimate rebalance against the world's ability to provide for its excess population will result in human suffering on a frightening scale. Nationally, we can look elsewhere with remorse upon the millions of humans who suffer from hunger, disease, and early miserable death. Because we refuse to control our populations, this is the unavoidable consequence; the fact that it's happening "elsewhere" allows us the comfortable complacency of believing that there don't have to be any losers, that it's not a zero sum game. Expressed in terms of health coverage, it may appear as an illusion of priorities--if only we could be smarter about allocation, everyone could be saved. But the hierarchy of priorities--the bell-curve of who gets what, across the spectrum of nations and economies--will eventually involve choices.

But there won't be any good choices.

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Addendum 3/3/10

I wish I believed that the government could organize and administer health care, while controlling costs. The government system model is being tried in several countries presently, but the jury is still out on how successful those models will continue to perform in the long term. But the point of my post isn't to set up a dialectic between "private" and "public" administration of coverage. My purpose is much larger, and may be pointlessly conceptual.

To restate: The earth's population has literally outrun the resources (both natural and "human") needed to support it. That shortfall notably includes medical care. Our view of American health care seems to be controlled by a couple of spurious assumptions: 1) That it would be possible, given the available resources, to deliver health care to every American, without somehow compromising every other budgetary priority, and 2) The amount of "profit" to be derived from any "for profit" social insurance system provides enough excess margin to make up for any shortfall in the cost of running a universal system.

If we extend the context to include the vast numbers of uncovered individuals in the so-called Third World, it becomes clear that global universal health coverage is truly unattainable. With the growth of the so-called "global economy" we're seeing that our traditional American historical insulation from other participants in the world economy is evaporating: The world economy truly is a zero sum game. Everyone can't be rich--and as population grows, the numbers of those who stand to be excluded grows, not just in terms of separate nations, but in terms of discrete classes of patrons.

America has a capitalist economy. Socialistic revisions of that system have been made, which moderate certain of its more destructive effects. It may well be that the American health insurance industry could be nationalized. That would allow us to claim that we had universal coverage, but it wouldn't generate more revenue. If we went on a pay-as-you-go basis, the budgetary compromises would end up looking exactly like the "arbitrary" measures private insurance companies engage in, i.e., some treatments, and some individuals would end up being deferred, or denied.

The idea that the only thing standing between the present situation, and a fully functioning universal health care system, is the elimination of the profit motive, is a serious delusion. What we could end up with would be a two-tiered system in which the rich would still acquire high-level treatment, while everyone else would be thrown into a third-rate system with compromised quality all down the line, because the cost to insure and treat the bottom 25% would easily drag the rest of the population down.

In my view, the real culprit in all this is the decline of the American middle class, with the resulting decline in real per capita income, occurring at just the moment in our history when health care costs are climbing rapidly.

Take the auto industry. America's on the verge of losing all automobile production to other national economies. The loss of that capital--and the fruit of that capitalization--is staggering. Millions and millions of jobs lost, buying power gone, and all the things which that capital once afforded--including good health care policies.

19 comments:

Why are the Republicans so partisan about holding the line against universal coverage? Because they realize that as the middle class shrinks--as America loses more jobs, and as its economy declines in real terms compared to China, India, etc.--the burden of taxation will fall increasingly upon their constituencies (the rich, the business interests, and foreign debt holders).

Yes. But why shouldn't the wealthy--especially ostentatiously wealthy, ala 500 grand+, corp. execs, etc--foot the bill, via taxes, or higher premiums on corps? It's amazing how juvenile financial barons sound when someone suggests they might have to pay more in taxes (that includes the GOP pundits ala Palin, Beck, even down to Kirby-O like rightwing populists and teabaggers)--US tax rates are still quite low, historically speaking (Reagan's first term, tax rate was like 50% on upper brackets). In most EU countries, they would pay more (unless ueber-rich, rock star like).

Excuse the normativity, but the US should have EU, or UK like health care. That's not especially radical, but pragmatic, and humanist. The main obstacle is probably US insurance companies, and inept and obstructive politicians. Dems themselves stump for the insurance biz, for most part.

Public H-c could be fairly easily improved: like an upgrade of the VA, and county facilities. Build a few more hospitals (not hundreds), issue cards to the po'. Most workers would still have their private care anyway, and could avoid the drama at the state/county facilities.

Instead the Demopublicans want to implement some grand mega-bureaucracy (even if still capitalist for the most part)--I suspect many contractors and developers want somethin' somethin' at the h-c gravy train as well.

Rational discussions of policy aren't facilitated by the use of fantasy.

KO is out to lunc here* EXCEPT for his complaint about "mak[ing] insurance companies pay out to people that they know are bad risks."

Most of us in favor of universal coverage [a majority of Americans] agree that this is not the most logical solution to lack of coverage. It's inappropriate to entrust a universal health care system to private insurance companies -- which of necessity exist to make money -- not for any public purpose.

Ultimately they will be cut out of the equation or forced to compete in a strictly regulated market -- as they have been in every other grown-up country.

* Obama was never a (never mind "the") lawyer for ACORN. And nobody ever "forced" banks to make bad loans (to anyone). Sub-prime (including "liar") loans were made in order to collect origination fees -- for mortgages which were then packaged and sold to (other) investors. My guess is that this garbled untruth refers to the fact that Fannie Mae and Freddie Mac were established to make home loans more widely available. (Though not to make loans to un-creditworthy borrowers.)

Corporate lobbyists have managed to rig the tax and trade systems so that it's actually more profitable to send American capital and natural resources overseas, and do the manufacturing there, and sell it back to Americans at "American prices" than it is to produce things here. That's just madness.

American automobile manufacturers didn't start contracting outside our borders until it became financially advantageous to do so. We need to remove those incentives, if we want to regain the productivity which once drove our prosperity. The choice is simple: Either we produce and profit, or we just consume our way into a long decline.

Here, there and everywhere, KO's out to lunch. As with his claim that Americans don't want health care--complete f-ing BS. The Lending crisis (brought about by bipartisan de-reg--ie Gramm/Gingrich/Clinton) or ACORN has nothing to with it--that's a Fox style red herring 101.

When KO and teabagger types whine about public h-c, they mean something like all the good WASPs on the block in Pleasantville don't care to go to hospitals or clinic alongside ...the poor, or "colored peoples," nor have their taxes raised a few twenties a year to pay for it.

Many Americans, even educated ones, never hit it big in the free market casino (including the academic free market)--unless one has a great job, there's usually copays, or the plan doesn't cover essentials (like dentistry, or eye care, etc). In effect, they pay more for h-c than many middle class, or wealthy via expensive temporary h-c programs, or cash at the doctor or dentist.

My fear--which Kirby may share, I'm not sure what his true position is here--is that a Federal universal health care program would compromise the coverage of everyone whose annual income is below, say, 125,000/annum in order to accommodate the bottom 25% of Americans who either have no employment, or no income to contribute to the system. Why the great majority of Americans who already have coverage should be required to fund this group is not clear. Is this social engineering?

I believe the real solution to be strict regulation--probably a Federal agency which monitors ALL health care insurance outfits, and makes them toe the line. I have a feeling that legislators are choosing universal coverage as a chickenshit way out of that problem. I think medical care needs to be incentivised, but it also needs to be regulated.

I feel the same way about our banking system. The controls were all removed in the 1980's and 1990's and look at the result.

I don't think anybody cares who they share it with (the left loves to pull the race canard, but it has nothing to do with this).

The thing is that you have to have a system that's sustainable.

Obama has no clue how to do this, and is legislating an unworkable system that is going to drown the country in debt, chase our remaining industry overseas, and then he's going to write another memoir about how cool he is.

The guy has never held a real job or had to make a payroll. He's nuts.

Ideally, I would love it everybody had an entire hospital waiting on them hand and foot. I'd love it every person on earth had this. From Calcutta to Zimbabwe.

In fact, I would love it if no animals were ever again injured, people ate no meat, and ladybugs were presidents, and crabs could cruise in convertibles through Bikini Bottom, reciting wondrous quatrains.

In the immediate present, I want a sustainable tax base, industries that feel like they have a fair shake in this country, a president with a realistic sense for how to make that happen, and no dumb moves forward that cause the whole system to collapse.

And yes, some 80% or more Americans are satisfied with their health insurance.

Obama's going to screw it all up, and bring the whole system down.

He's a dope, without the faintest trace of a clue. Pelosi is just as bad. Howard Dean is a shrieking train wreck.

It's not really about funding h-c for transients. Working poor, or struggling families and individuals, the unemployed are not usually ....street peoples, many of whom are mentally ill anyway, or have some institutional support (though in CA, Ahhnuldnomics resulted in many mentally ill being let loose--).

Transients have county facilities anyway, which are not great, but generally suffice (and to be honest, many people, not just bums, make use of county facilies-- in ellay county at least, and they need improvements).

But it's not really about helping transients (though for many, a heroin stipend might be of some assistance), but about affordable, accessible health care for people of modest means, up to say middle class. Successful, or middle class people (say 40 grand per annum+) have decent plans, if not great, and they should not be allowed to save hundreds or thousands by using public h-c.

I don't think modest tax increases to improve h-c, especially on upper brackets or corporations are mistaken either. The govt. should take out the insurance racket also, but that's not likely to happen. Businessmen don't want the higher premiums, but they didn't want worker's comp and labor laws either. Compared to the EU, the US is still living in the 19th century. The GOP greedheads opposed even the moderate reform--say allowing people to join Medicare at 60 (or better, 55) instead of 65 or whatever...

KO's mistaken on what the public supports as well: why did Obama, pro-health care, win by vast majority, and the anti-h-c team of McCaint and Sarah Klondike (KO's aesthetic heroine) FAIL?

Are the people on Medicare the Left as well? Or the politicians who supported it (including ....Reagan himself, who raised payroll taxes slightly to improve Medicare)

Back in the day (as under the FDR admin....that's like US History, not Heroic Lit. for Hard-right Conservatives),the repugs protested medicare, S.S, and most govt programs (even health codes)--yapping socialism, the left, marxism, interventionism, etc. BS. The programs passed, and the majority wanted 'em.

Small reforms to Medicare and VA (send transients to VA, say) would suffice. Even some repubs support that. It's the teabagger know-nothing left who's obstructing what the public wants (foxco idjits for instance continually repeat taxes are "sky high," when they're barely above BushCo levels).

Slight capital gains increases on ueber-rich could pay for, like, everything and balance the budget, but that sort of reasonable reform won't happen. Youll have to wait until Hugo Chavez is at the door (tho teabaggers, if they live, will be getting their h-c in a gulag most likely)

You seem to see things exclusively in terms of the competing partisan versions of events. I see both sides as selfishly fronting for impractical and consciously fake agendas, neither side willing to acknowledge the potential downside of their programs. You parrot the usual "tax the shit out those filthy rich folks," as if politics and the business of government were a playground contest of getting even with people you envy and despise. But there may be good reasons for a graduated income tax, which have nothing to do with class envy and resentment. Bush II pushed through tax cuts for the rich, just at the moment it seemed we stood on the threshold of balancing our Federal budget. It shouldn't have been allowed, but it happened. Then, as we know, he started two foreign wars, and added the drug bill to his legacy. Without those tax cuts--which you may remember were supposed to create jobs--and war spending, our ability to pay for expanded health benefits would look a lot different today.

But you can't turn back the clock. The money we might have allocated to health coverage is gone. You can't simply say, build the deficit indefinitely. Deficit spending is killing our economy. America's economic position in the world has been steadily declining over the last three decades. Our middle class is being gutted. We're all going to have to do more, with less. We can't afford everything we think we need. We can't have an empire military and also a huge welfare state with 60% of the population receiving aid. We've gone from being a productive economy, to being one focused on consumption. Our consumption has been underwritten ("subsidized" actually) through loans and borrowing and leveraging inflated real estate and stock. But the bill collector is knocking at the door. Are you in a position to pay him now, or do you want another extension. There isn't enough ore in them thar hills to pay for all the things we think we need and want.

Not motivated by envy, resentment, nor hatred, but mainly by pragmatism, tho' will admit to a slight interest in something like social justice, rather than assisting oligarchies--not the same as collectivism, though even ...marxist-statist strategies are worth a few nano-seconds of reflection. I don't begrudge say my fairly wealthy doctor neighbors, or the few successful teachers, or engineers. But most wealthy around SoCal tend to be members of the ...pimpocracy--brokers, lawyers, real estate and insurance shysters, entertainment and athletic hucksters, if not actual porno producers....(ah sh**t you not)

As far as your somewhat Randian or libertarian critiques go, the real hicks are the raving anti-tax teabaggers who have yet to realize that Reagan- style supply-side econ. (actually the biggest cuts weren't until '86) are not synonymous with American tradition. Even RR at times protected New Deal programs (unlike the Bush gang, or Clinton for that matter).

Humans depend on essential services and programs, such as Medicare (which could easily be upgraded), or state/county facilities. Tax rates will need to be increased to cover costs. For that matter, the state of CA's out of money as well. At least they'll need more tax revenues to fund more prisons for the...rabble that the GOP yacht club has laid off, and turned into perps or mental patients.

"Not motivated by envy, resentment, nor hatred, but mainly by pragmatism, tho' will admit to a slight interest in something like social justice, rather than assisting oligarchies--not the same as collectivism, though even ...marxist-statist strategies are worth a few nano-seconds of reflection. I don't begrudge say my fairly wealthy doctor neighbors, or the few successful teachers, or engineers. But most wealthy around SoCal tend to be members of the ...pimpocracy--brokers, lawyers, real estate and insurance shysters, entertainment and athletic hucksters, if not actual porno producers....(ah sh**t you not)"

J: America has been losing its middle class. Our agricultural and manufacturing middle class has been evaporating, facilitated by tax and employment regulation which favors offshore-ing. When America was prosperous, in the 1950's and 1960's, our middle class was earning a decent income, and could, with a little moxie, afford a single family house, a reliable car (or two), and a decent health plan. Those days are gone. Today it takes two members of a household (or more) to maintain a semblance of the same prosperity--this is the real root of the problem. With less capital staying in America, and fewer middle-class jobs, the tax base has collapsed. The answer to the problem of how to pay for the things this middle class tax based once supported, isn't to tax homeowners or upper middle class professionals up to the hilt. We don't want an economy built around the Swedish or German models, where everyone pays out more than half their income to the state, in return for being kept as de-facto chattels of Mother. What IS NEEDED is sensible regulation and oversight of the banking and insurance industries, to prevent them from gaming and gouging--

"As far as your somewhat Randian or libertarian critiques go, the real hicks are the raving anti-tax teabaggers who have yet to realize that Reagan- style supply-side econ. (actually the biggest cuts weren't until '86) are not synonymous with American tradition. Even RR at times protected New Deal programs (unlike the Bush gang, or Clinton for that matter)."

I am not a conservative, nor do I take a libertarian stance on anything. These tags presume a kind of philosophical position irrespective of applications. I think of things in terms of their practical applications--not in terms of insisting on unworkable programs simply because they're being "the right thing to do"--there is no "right thing" unless is actually works. If our private insurance industry no longer "works" then it needs to be tweaked or fixed so that it does serve its publics; I'm NOT convinced that precipitously incorporating the bottom 25% of uncovered (or poorly covered, by Medicaid and local hospitals) Americans into a big one-size fits all system will really result in satisfactory universal care for everyone. For those people who currently have a full range health care policy, I think they would stand to lose benefits and quality under the Obama plan. If that's of no concern to you, then fine, you've made your point. But those policy-holders--in large part the working middle-class folks--might prefer to let the status-quo continue, instead of trashing it in favor of a new universal system.

"Humans depend on essential services and programs, such as Medicare (which could easily be upgraded), or state/county facilities. Tax rates will need to be increased to cover costs. For that matter, the state of CA's out of money as well. At least they'll need more tax revenues to fund more prisons for the...rabble that the GOP yacht club has laid off, and turned into perps or mental patients."

The budgetary short-falls you describe won't support new swaths of "mass entitlement" as proposed by Obama. We can't simply keep raising taxes and fees. At some point, the services we think of as entitlements will be curtailed by the dimensions of the overall economy. As the American economy shrinks, so will all the benefits we've become accustomed to. Health coverage isn't a right, it's a privilege, a product which you buy. If you insist on defining it as a right, then you have to figure out a cost-benefit analysis which makes that right affordable. Cost isn't an irrelevancy, it's the whole ball of wax.

We don't want an economy built around the Swedish or German models, where everyone pays out more than half their income to the state, in return for being kept as de-facto chattels of Mother.

We don't? Depends where you stand, Sir F.-- Deutschland may not be great for real estate speculators, sales-bots, stockbrokers, executives, or other types of financial shysters. But workers, even intellectual workers (ie educators, engineers, doctors, etc) definitely have a better situation, superior benefits, longer vacations, health care, so forth. The Germans and swedish education systems far outrank the US as well. Northern Europe (including UK) may seem a bit cold and bureaucratic to some 'Mericans, to others it looks something like...Ordnung....(and really even in regards to civil liberties, hardly as conservative or police state-like as US).

Aren't you a Cal alum? Brad DeLong, Cal econ. guru penned some essays a few months ago on the desirability of swedish economic/social models. I was nearly impressed ('specially since DeLong usually just chants the endless Keynesian macro. jive...)